IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

LUIS E. MUNOZ, et al. : CIVIL ACTION

:

v. :

:

CITY OF PHILADELPHIA, et al. : NO. 05-5318

MEMORANDUM

Bartle, C.J. March 3, 2008

Defendants, City of Philadelphia (the "City") and the 

Philadelphia Redevelopment Authority ("RDA"), have moved for a

stay of execution of a money judgment against them pending appeal

without the necessity of posting a supersedeas bond. Plaintiffs

oppose the motion.

Plaintiffs Luis and Deborah Munoz (the "Munozes"), who

are husband and wife, and General Farmers Market, Inc. obtained a

jury verdict against defendants in the amount of $497,230. 

Following the granting in part of defendants' post-trial motions,

the court entered an amended judgment against the City and the

RDA, jointly and severally, in the amount of $429,230. 

Thereafter, defendants filed a notice of appeal but did not

obtain a supersedeas bond. Plaintiffs subsequently served notice

that they would begin execution. This motion followed.

Defendants cite Rule 62(d) and (f) of the Federal Rules

of Civil Procedure, which provide:

(d) Stay with Bond on Appeal. If an appeal

is taken, the appellant may obtain a stay by

supersedeas bond, except in an action

Case 2:05-cv-05318-HB Document 131 Filed 03/03/08 Page 1 of 7
1. Rule 62(a)(1) and (2) are not applicable here.

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described in Rule 62(a)(1) or (2). The bond 1

may be given upon or after filing the notice

of appeal or after obtaining the order

allowing the appeal. The stay takes effect

when the court approves the bond.

...

(f) Stay in Favor of a Judgment Debtor Under

State Law. If a judgment is a lien on the

judgment debtor's property under the law of

the state where the court is located, the

judgment debtor is entitled to the same stay

of execution the state court would give.

We first consider Rule 62(f). Under Pennsylvania law,

"[a]ny judgment or other order of a court of common pleas for the

payment of money shall be a lien upon real property ...." 42 Pa.

Const. Stat. Ann. § 4303(a). Once the judgment is recorded, it

becomes a lien on the real property of the debtor in the county

in which the judgment is recorded. See In re Upset Sale, Tax

Claim Bureau of Berks County, 479 A.2d 940, 943 (Pa. 1984); North

Am. Specialty Ins. Co. v. Chichester Sch. Dist., 2001 U.S. Dist.

LEXIS 5544 at *4-*5 (E.D. Pa. Apr. 4, 2001).

Moreover, Rule 1736(a)(2) and (b) of the Pennsylvania

Rules of Appellate Procedure state:

(a) General rule. No security shall be

required of:

...

(2) Any political subdivision or any

officer thereof, acting in his official

capacity, except in any case in which a

common pleas court has affirmed an

arbitration award in a grievance or

similar personnel matter.

Case 2:05-cv-05318-HB Document 131 Filed 03/03/08 Page 2 of 7
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...

(b) Supersedeas automatic. Unless otherwise

ordered pursuant to this chapter the taking

of an appeal by any party specified in

Subdivision (a) of this rule shall operate as

a supersedeas in favor of such party.

There can be no doubt that the judgment at issue is a

lien on the real estate of the City of Philadelphia under

Pennsylvania law, that the City is a political subdivision of the

Commonwealth of Pennsylvania, and that the City is exempt under

state law from filing security on appeal. The City is therefore

exempt from filing a bond in this court under Rule 62(f).

Plaintiffs assert, however, that the RDA is not a

political subdivision. Plaintiffs point to the answer of the RDA

to plaintiffs' complaint in which it pleaded: "Defendant RDA is

a body corporate and politic, organized pursuant to the Urban

Development Law, 35 P.S. § 1701 et seq. It is not a municipal

body." Answer, ¶ 7. Assuming that the RDA is not a political

subdivision as that term is used in the Pennsylvania Appellate

Rules, we turn to Rule 62(d). As noted above, it reads in

relevant part that "if an appeal is taken, an appellant may

obtain a stay by supersedeas bond." Plaintiffs argue that only

exceptional circumstances, which in their view do not exist here,

allow a court to exempt an appellant from filing a bond. See

Schreiber v. Kellogg, 839 F. Supp. 1157, 1159 (E.D. Pa. 1993). 

In Schreiber, the judgment debtor was an individual and not a

governmental or quasi-governmental entity, such as the City or

Case 2:05-cv-05318-HB Document 131 Filed 03/03/08 Page 3 of 7
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the RDA. The court found that exceptional circumstances did not

exist to excuse him from filing a bond on appeal.

Our Court of Appeals has not had occasion to pass upon

Rule 62(d). Other Courts of Appeals, however, have held that

Rule 62(d) does not preclude a district court from staying the

execution of a judgment pending appeal without the filing of a

supersedeas bond. The Court of Appeals for the Seventh Circuit

has explained, 'the Rule in no way necessarily implies that

filing a bond is the only way to obtain a stay.' Arban v. West

Publ'g Corp., 345 F.3d 390, 409 (7th Cir. 2003). It cautioned

against inflexibility where it is plain that the judgment debtor

can pay the judgment and a bond would be a waste of money. Id. 

See also, Federal Prescription Serv., Inc. v. Am. Pharm. Ass'n,

636 F.2d 755 (D.C. Cir. 1980).

In Dillon v. City of Chicago, 866 F.2d 902 (7th Cir.

1988), the Court of Appeals reversed a District Court for failure

to allow the City of Chicago an automatic stay pending an appeal

of a money judgment. It enumerated a number of factors to

consider:

(1) the complexity of the collection process;

(2) the amount of time required to obtain a

judgment after it is affirmed on appeal; (3)

the degree of confidence that the district

court has in the availability of funds to pay

the judgment ...; (4) whether "the

defendant's ability to pay the judgment is so

plain that the cost of a bond would be a

waste of money" ...; and (5) whether the

defendant is in such a precarious financial

situation that the requirement to post a bond

would place other creditors of the defendant

in an insecure position ....

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Id. at 904-05 (internal citations omitted).

The City and the RDA agree that if there is any

liability in favor of plaintiffs, it is joint and several as set

forth in the judgment. In support of defendants' pending motion,

the City has submitted a verified statement by its Budget

Director, Stephen Agostini, pursuant to 28 U.S.C. § 1746. He

stated that the City maintains an Indemnities Fund from which

settlements and judgments against the City are paid. 

Historically, $25 million has been appropriated annually by the

City Council of Philadelphia. For the fiscal year 2007, $20

million has been appropriated with a pending bill in City Council

to add an additional $5 million. The Mayor's budget for fiscal

year 2009, beginning on July 1, 2008, proposes $25 million for

the Fund. From what Mr. Agostini has said, we have no reason to

believe that the judgment, if affirmed, would not be paid and

paid promptly. The plaintiffs have countered with no evidence

that the City will either be unwilling or unable to pay the

judgment at issue in a timely manner.

We find and conclude that the City of Philadelphia has

sufficient funds to pay the $429,230 judgment in favor of

plaintiffs. We reiterate that there is no basis to think that

prompt payment will not take place should the judgment be

sustained on appeal. Under the circumstances, the financial

condition of the RDA is of little concern because plaintiffs will

be able to obtain full satisfaction from the City. To require a

bond of either would be a waste of taxpayers' money.

Case 2:05-cv-05318-HB Document 131 Filed 03/03/08 Page 5 of 7
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Accordingly, we will stay execution on the judgment

against the City and the RDA without the filing of a supersedeas

bond. We do so pursuant to Rule 62(d) and (f) as to the City and

Rule 62(d) as to the RDA.

Case 2:05-cv-05318-HB Document 131 Filed 03/03/08 Page 6 of 7
IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

LUIS E. MUNOZ, et al. : CIVIL ACTION

:

v. :

:

CITY OF PHILADELPHIA, et al. : NO. 05-5318

ORDER

AND NOW, this 3rd day of March, 2008, for the reasons

set forth in the accompanying Memorandum, it is hereby ORDERED

that:

(1) the motion of defendants City of Philadelphia and

the Philadelphia Redevelopment Authority to stay the execution of

judgment pending appeal and to waive the bond requirement is

GRANTED; and

(2) execution of the amended judgment is STAYED

pending appeal, and no supersedeas bond is required.

BY THE COURT:

/s/ Harvey Bartle III 

C.J.

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